2014-01-09 / News

FY13 audit reveals surplus

Town side shows deficit, but savings at schools lead to leftover $500K
By Margo Sullivan

Jamestown passed the annual audit with high marks and a $496,242 surplus for the fiscal year ending June 30, 2013, according to independent auditor Paul Dansereau.

At Monday’s Town Council meeting, Dansereau, a certified public accountant with auditors Baxter, Dansereau & Associates, of West Warwick, gave the town a clean bill of financial health and said no accounting irregularities had been detected in the financial statements of either the School Department or the municipal government.

“We didn’t find any material on statements that needed to be disclosed,” Dansereau said. That included both the federal compliance report and the financial statements.

Dansereau explained his company does two audits. The first report is on both the school and town financial statements. He concluded the finance officers have presented the town’s financial position fairly. The second report, for the federal government, found the town is in compliance with federal grant requirements.

The surplus reflects the combined School Department and municipal government budget, although the town side actually had a deficit of $93,070. However, the schools showed excess revenues of $589,312 for an overall budget surplus of $496,242, Dansereau said.

Accounting figures for the schools and town must be combined in the general fund per federal regulations, Dansereau said, because the Jamestown schools do not meet the threshold for reporting as a special revenue fund. That’s because less than 20 percent of the school budget is restricted for purposes other than debt service and capital projects, and reflects the reality that the Jamestown schools receive scant state assistance.

However, the report does include a detailed section that breaks out the school finances separately from the town government side.

The municipal spending deficit was primarily due to the cost of two waterfront construction jobs that were not budgeted: the East Ferry seawall and Dumpling Drive repair project.

East Ferry seawall used $484,037 from the general fund, and $43,881 was used for Dumpling Drive. The Harbor Commission is being charged for half the costs, which will be paid in installments over five years. The harbor board will reimburse the town $38,700 in 2014.

Finance Director Tina Collins said the Town Council also approved an expenditure of $80,000 for a heating system at the rec center. That money had not been in the budget and was transferred to the capital fund from the undesignated fund.

“The town would have had a surplus for the year if it weren’t for the unbudgeted expenses,” Dansereau said.

He said the items were on a par with emergency expenditures.

“If we did not have those, we would have had a real good year,” Collins said.

Councilor Mary Meagher asked if the town-side surplus would have reached $1 million otherwise.

“No,” Collins said.

Without the expenses for the waterfront repairs and the heating system, Dansereau said, the town’s budget would have been $480,000 “to the good.”

Meagher wanted to verify that although the town took out the full amount for the waterfront projects, the Harbor Commission would contribute over several years.

Dansereau confirmed the installments can be included with revenues in subsequent years, and Collins said she will also include “an identifiable source of revenue” for the harbor installments starting in fiscal year 2014.

However, the entire seawall project cost had to be “expensed” this year, Dansereau said.

“You can’t defer it because you spent it,” Dansereau said.

Another revenue adjustment resulted from the council’s decision last year to use $312,000 from the fund balance to keep the tax rate the same. That money had to be deducted from the total municipal revenues, he said.

On the revenues side, the town collected $390,867 more than expected in real estate and tangible taxes due to the payment of overdue taxes and a high collection rate, according to Collins in her summary. The licensing and permitting line also came in over budget because of “higher-thananticipated recordings and construction.”

Another boost came from the intergovernmental and departmental line, which was over by $227,228. The reason was due to unbudgeted federal stabilization funds and higher-than-expected activity in several departments.

Interest income on investments continued to droop and came in under budget.

On the expense side, the rec department and public safety came in $29,484 and $34,963, respectively, under budget due to cost savings. But financial administration and the tax assessor’s office went over budget by $24,320 due to unanticipated expenses, and Jamestown paid $71,312 extra in debt service due to a 2009-10 warrant article that specified some debt would be paid from the undesignated fund.

Overall, according to the financial highlights section compiled by Collins, “The town’s primary government net position increased in the amount of $385,054 as a result of the current year’s operations.”

Operating expenses totaled $25.3 million against revenues of $25.7 million.

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